In the competitive restaurant game, the balance between attracting customers and maintaining profitability is a tightrope walk. Restaurant owners, constantly seeking innovative ways to fill their tables, often find themselves pondering over the efficacy of discounts. It's here that the concept of incremental revenue steps in, especially when considering platforms like "First Table". Let's unravel this idea and dispel the myth that a 50% discount is a loss rather than an opportunity.

In this article:

• Understanding incremental revenue
• Debunking the discount myth with First Table
• The ripple effect
• How to maximise incremental revenue 

Understanding incremental revenue

At its core, incremental revenue refers to the additional income generated from sales that would not have occurred without a specific action or strategy. In the restaurant context, this translates to filling tables that would otherwise remain empty. The key here is recognising that this revenue is not 'discounted' money but rather 'added' money.

Think of it this way: if a table sits empty, it generates zero revenue. Any income earned from that table, even at a discounted rate, is incremental – it's revenue that wouldn't exist otherwise. This perspective shifts the focus from what is seemingly 'lost' in a discount to what is 'gained' in additional patronage.

Debunking the discount myth with First Table

First Table, a restaurant discovery platform, exemplifies the power of harnessing incremental revenue. First Table offers a 50% discount for off-peak diners at participating restaurants. The initial reaction might be to view this as a loss of half the revenue. However, this viewpoint overlooks the crucial fact: you can't discount something that was never there in the first place.

By offering an off peak special on tables that would likely remain unoccupied, First Table drives customers to your restaurant at times when your business is slower. These are customers who may not have dined at your restaurant without this incentive. The revenue from these bookings is incremental; it's additional income that offsets the perceived loss from the discount.

The ripple effect of incremental revenue

Welcoming diners through First Table has a ripple effect. These early diners not only contribute directly to your revenue but also indirectly through potential upselling opportunities. They might spend on drinks, appetisers, or desserts that they might not have considered otherwise. Moreover, their presence creates an ambience, making your restaurant look bustling and inviting to passersby, potentially attracting more customers.

Additionally, satisfied customers are likely to return without the discount, bring friends, or spread the word, further increasing future revenue streams. This word-of-mouth marketing is invaluable and comes at no additional cost to restaurants. 

How to maximise incremental revenue

To make the most out of platforms like First Table, consider the following strategies:

1. Exceptional service and experience: Ensure that the dining experience for discounted diners is on par with full-paying customers. This approach fosters positive reviews and higher spending and encourages repeat visitation. 

2. Upselling: Train your staff to skillfully suggest additional items, like speciality drinks or desserts, to enhance the dining experience and increase cover sizes. 

3. Leveraging quiet hours: First Table is designed to leverage the restaurant's usually quiet, off-peak times. This strategy avoids displacing full-paying customers during peak hours.

4. Analysing performance: Keep track of the performance on days when First Table is offered. Analyse the average spending per table, customer feedback, and overall foot traffic.

Conclusion

The concept of incremental revenue, particularly in the context of First Table, offers a fresh perspective on discounts. Rather than viewing discounts as a loss of potential revenue, see them as a strategic tool for generating additional income from resources that would otherwise remain underutilised. By embracing this approach, you can transform seemingly quiet hours into profitable opportunities, ultimately contributing to the sustained growth and success of your restaurant.

Want to learn more about how First Table generates incremental revenue, download our info pack below.